The Forgotten Man: A New History of the Great Depression by Amity Shlaes
I highly recommend this book because it has important lessons for policy makers in the Obama Administration who will address the current international economic downturn. The book is an excellent rebuttal to anyone who claims “FDR’s policies got us out of the Great Depression.”
The New Deal programs of the 1930’s such as the establishment of Social Security, the Securities and Exchange Commission, and the FDIC were essential reforms. A significant number of President Franklin Roosevelt’s reforms were actually began during the Herbert Hoover Administration. A significant change was that FDR began the process of reversing the disastrous protectionism of Hoover’s Smoot-Hawley Tariff, which raised rates to 70% and resulted in trade barriers around the world. The tariff rates came down but they were still too high to generate global trade.
Other New Deal efforts to limit supply and control wages and prices were definitely not successful. In fact, the author demonstrates how the National Recovery Act and the Works Progress Administration were a hindrance to economic recovery. The Great Depression began at the end of October in 1929, but in 1938 another serious downturn occurred. This was called “a depression within a depression,” and it emphasized the failure of so many New Deal reforms. FDR’s attacks on the business community, his high tax rates and his class warfare rhetoric all resulted in a dramatic drop in the type of investment which was essential for recovery.
I have read many books on the causes and consequences of the Great Depression and I would rank this as one of the best. I saw many parallels to the increased tax and spend policies which are being advocated today.